Expectation : Tie chge - behavior : labor _ market chge ⑥ what Price court u - setty behavior of firm I actual inflation think true comes in ; price tie-in them of Shorty demand a output ↑→ production goods in short income ↑ t black market run ↑ eamhwphion ☐ ↓ quickly then ( transitory shock ↳ uncertain et wwe eco \ : " ith shock Enid ) " ke reams rescue no create new g : Pandemic : C ↓ 3ʳᵈ → Shock AD stuff left + ; Y ↓ over , : Firm in CB on larry but Goes a line over difficult 2ⁿᵈ period M ad or As I produce P a rant raise > deep 1GB AD shift instead if AS shift crisis acts knw the original poifit.im Y 1- of at to not ↓ Supply ; • equilibrium cut prices is a is e. more earning I ⁿʰ " If shock → help must Ghiet shock sh.tt " \ I shock ~ artificial demand ↳ ↑ mbʰ•É÷¥÷↑ period ↳ illegal source shoot from they bk slowly of the An ↳ AS I don't shock CB ↑rⁿʰ applied ↳ TRMP came had effect > =) What are do we do Contufiy & where we are panic in market the In short RMP run , = romp YZLB Medium run RMP • RMP • romp = y 1 RMP { "☐ = + RMP Y romp ∅y(Y-) ∅y(I) Ola -4 + + R : " / crisis = ° - ↳ Y " ∅y( % psychological F) - " I - Tee ¥ = a " = ( dy - - + a at - Central banks ) RMP ae ✗≤ ✗ : too low ∅ ( : a- , also look at RMP = " ≤ a a Bla "My Central banks ae - { Rµp=◦ [ ⇐ Y is below is too conflicting information low a + :O RMP romp =D no da [ - a - Fix Y interest when - a e) variable one ↳ Exa at ) → Given : : a saving RMP , money Cest level of 42lb a = , at hor -1 deflation - & ② a is too low level of in a eco a2↳ hide ) - • do at to = 0 Y trigger Y "%a↑ inner the ↑ d CB independent hits deep if a crisis In Y is → → at a ↓ falls too much time of ae panic given a market panic happens : at higher output level y 4--4*0 of Y even a remaining /y RMP ↓ YZLB over level Ado not not pay ≤ losing crisis noky on y , Given Y at y > ↑↑ [ economy focus I threshold If Y economy Fix at) employment y↓c while a YP at ? concern RMP from a > h ee tools romp) - + too low is is a et) out of runs > . > "" CB -0 - policy da ( + RMP when is ② RMD = ( dy deep : > Crisis + ¥ = /a romp = ( Y- ) dy : ' ↳ Deep + quite high : start panic In medium In run by shock , happens , we try 1- back push potential output to , we 're able dye to ↳ " capital neat dye in ② pm " = is 0 too b/c Eh low Bly " a is /y capital dye Y new Tl same ¢ with little ↳↳ ru given scare labor level of 4- RMP = POMP c- tie + too low @ I ← ∅, a ☒y "My _a2< Bly ( Y) roMP-ae-cdy.to/a-uT-&Y-.y + = = ∅ , / " a /y - at ) - 0 - from P - at + dy - -ˢ . + at Questions A : normal Iso cycle business r : e%gm→ = Ife - - r romp = ' Y ∅y(Y) + a Puri , deep crisis scenario r : - . Dug the f- = row 42 when 9 AN = deep o - AD (4) ry - " the , , _ (Y AD 0.3 = ☒ Ir + Be - er 19 = ADT -0.1133 ( = ° Is, + Cre Afro = (a ∅ -9 - at ) + Thee - as Y . " /a) row cure is AD curve in " =D → -12 r a = < - " = ¥y [∅y : ✓ AT 1- ADT . Y ¥Q← C , CLI ca + ¥r= @ @+WiT nwo + _ - = 0.11 -0.03 = 0.0033 pbgr into AD ' - = AS , the normal burner model o RM . - A- So I 1.35 AS , the is = Ape Y . cleaned is crisis { → ᵈ the vai Thin - ?⃝ In Y= DD G- Foy Iso → T.in 9.1838 = We w#+×¥I-Y÷ - romp - ae data at] - - Normal borne Crisis Fk at : at : ⇐ s r ; at ← PTnsZ÷↑ rt r.me ↑ ↑ got 2% if at overtire Pishgher cents rt \ pniebrelisasttfirnma-i-a-P.li#+--K+.R??L+. W +prnmnkt.lt CB ecomzt Foc Alp to inflation : same : nature of Him Pt : . Pt nature of eco 22¥ . ¥-2 ante - - Rt wt = 0 = 0 z 3¥ Grid R¥ } = any = create by → value added than too advanced to adapt tech modern train workers Effected labor A- 4. ~ nature of wrk → Rlh real wp÷ } > poor }yg } Listed productive facts Were worker real interests Amore ¥wyda☒d product in 's US > inn wage Y FCKT = yt y = let Assumption = 1 At , Yt 4- + , + 4- = # @ f. Lt ) " " GDP Morita labor : " heh augment production - population ¥ closed ( leg ) ( Itn) economy tech : ↑ program on % Ige averagely productivity =C¥i ✗ E- = " (1-8) k* + - s = worker output per effective a¥ big A capital : grows sternly - .cl - 8) . Kt + + endogenous i/ s a model Growth exogenous i kid = =¥:÷ "¥!!÷ = , = : → : productie ↑ per SE ¥÷!::¥÷÷= 14-+1 £¥, = 1% function effective worker G: At = ✗ Per worker St = Kt worker St = tee ) capital : It A Lt output per : ¥7 : , = KÉ CAT S . Yt 0<121 : say rate model " " "• " equilibrium ↓ steady state .lt ) "" "¥:¥? =¥?:¥-¥÷i÷ , + s . "¥¥¥iI÷÷ , ts.ee#YTAkT-+i=kT+ ] / C- 8) = ¥ - , . = É - @+g¥g ° " =a¥= - - ☒ + ÷→.ñ g# " 0.01 } 0.00001 ↳ none . ::-÷ñ+ˢ-→¥÷--"¥;:i "I¥g - %: Ñ if + it 1Ñ-nen+g).Ñ_ = 1) @ + n + g) ns.ei . KT . act GDP /wheres nuÉ do? WE ↓ ' que 9yith.nl ad buddy mkay / =#÷↳J=ñE / ¥f =¥÷↳ ① log ?¥ _ At = =P 4 I =0 say ' → Toi do? , www. B- ↳ ¥f + + At ↳A inlym ˢ¥?i=ˢ¥-+ , . # # YÑT bag'bi' dirty trying )Ñ+ + i , s S & " " ' , " "^ ski = ab + Sab the diminishing value d + 9 + ' Dab n % ! ' K > k- s.TW >0 ↳ net investment =O K > no (s+n+g).Ñ+- The invested capital As sÑÉ {@ + " increases n + g) . Ñ+ depreciated the net , y = value of AÑT investment " " abb = %Ñ+ the ( bebb %K+ - s own is capital - + will "" ʰ% ¥ + be ( %-) Ka ATG sÑi < 0 The invested ten k* K ' capital is used is %↳ - ng - %dt n capital large much capital to we I still small much to grow µ, depreciated → Ice the → capital is bag Skt the gross investment , K* > =D → unused ~ = the depreciating 069 = capital " " ↳& :/at -1%4 = ↳ at - ↳ bt . cs-en-igj.IE capital ↳" ¥ .sd←=÷ .su ¥ .sk , < " ᵈᵗ ↳ depreciated [ ˢÑÑ 1*-14=1+-09-+1-+4 ¥5 present capital % At - 7- small b.ba c- the Ifaddno more + " : = replacing = ^ " are " log or use ) Sa ) + 2¥ :# Ñᵗ=¥t capital left @ = = ' ! R, + , l ! g depreciate 's parameter # I ' initiative , / i ( _ from StÉt I ' , Ñtᵈ investment " " . a%Él Kt - n+g)¥ > neg ^ " ° or " BT inured = - Hat -%t . sit ( "=¥s "" %;¥;¥!_! ' ' - nᵈ per unit of effective line worker ( ( Iit ) % 4. ¥+7T = Ñ > investment % At - s - = grmkrate → g - % 4- - ↳ to worker better / ( workers s . Lt Ñt equip ↓ hey ( At ↑ SÑF bodes " Net investment :•p◦ the when - gown read , • • negative At steady É ales state : Ñ > did xals ) Kanes more ↑ egipmee SKI *¥0 capital the market workers wk more capital " 4) ) equipment new -0 Kt grows if demand nub join ↑ At mai f fever recruit groin n - chef -8 = , 4. K+ = , investment no wwe p the son , " " " " - sina.yq.gg At grows faster n Solow diagram t ↑ , born < IT more 1 * ; * net investment is ! 0 : - Kes 46 " ←↳dñ cn☒H ↓ K > Kss GR > [ 0, • ki t.KTL-C-in-sj.tt = bashir? @ Ss meichictidaihi:( Gm) GRCYT ) + g) # + n ( ¥÷↳ - SS At Ñ " = • # conlst ✗ GR("÷)=GR( G ) ° = Yt At • ( K+ ) GR Economy 's well - GDP by ① Catch - effect up grows when A only → Open eamy ( E. GR = ; . ? → ◦ ↳ Icing → s . Ñt ) poorer At 4- ) . grows ✗ GR ( Ar ) n -1 .tGRC↳ ) g + Shary the country = GR = same g + (E) n K↑ t c- GRCAr ) g If g = (at SS Cat + ] ss GRCLT) Ñ , in Sanz Esher randall : bÑtei=0→ SEEK = @ in KY + ! ' ' i. , ! country I > - : ki ' investment link =) i return faster grow who Ther than 2-3 , i. county> county & & poor - > [ grow i ! i I 1 I ! ! " " Kt in But higher be Ñ* ! K: A will forever s. 14T¥ " = " " ˢ+^¥ mi: 1 ' g) + ) higher growth bad ↳ @ neg )Ñ 121¥ ^ r It =D higher imaret ② Chge structure further flows Great) + 0 FDI + I countries ' 6 4) + GR = = • a ¥¥ = const = • • GRCYT.AT = = : Ss > SS when 4) A. < when ↓ . GR = ↑ .EE = , remora more → investment µ GR → grow onb temporary by grouse higher fork Golden 3 of rate Saiz It = What : - % - = Ñ* Foc _ ¥É;= ✗ . IÉ Sao a country do in SS ñ save → GDP bÉ Otupleikoj G- max Ss the sÑt+ , I = s 0 . Ñt* ✗ = @ + g-in ) . 1¥ . " " know , EI s Cents)=O - (G) optimal → for ( at (Seney) k+* a . rate Chin Shim ( ˢ;)± ¥+ = = ss Yi KEV = optimal swig the is = (+2+-1) # The optimal Sajak is : 1=2 Q✗t=É# FOCS Zz : {¥b) Income P = =p 2¥ . . of share 2¥ . 2¥ c) 2¥ - capital owners ¥ " = 2¥ a. @ . a. = ¥ F- - k Yt . d- 2) A = = are ✗ or 3¥ → =D R " L =D w k=M.k¥ = = - K . ? L f* . - ✗ = ¥ .ie#.fw)Z [4- D. A ↳ level of Film plgmat ↳ g- It is set by the firm the Labor demand equation I = [ c- 2) K A ↑ wt PT . K need ' ± ] . more labor (f) → £ LT Ld o firms need ( extra more works more labor hours production ) 2↑